Bitcoin Stuck: Here Are 2 Things That Must Happen For BTC To Break $72,000



At
spot
rates,
Bitcoin
is
firm,
but
traders
doubt
the
uptrend
following
the
unexpected
dump
on
June
11.
Currently,
Bitcoin
is
stable,
trending
above
$67,000
and
down
despite
gains
on
June
12.


Still,
even
at
this
level,
there
are
concerns
because
the
coin,
despite
all
the
confidence
across
the
board,
remains
below
$72,000.
This
reaction
line
is
emerging
as
a
key
liquidation
area.
If
broken,
BTC
could
unleash
a
wave
of
short
liquidation,
accelerating
the
lift-off
to
$74,000
and
beyond.

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Will
Bitcoin
Demand
Soar
In
Spot
Markets?


Taking
to
X,
one
on-chain
analyst


said


that
Bitcoin
is
stagnating
at
spot
levels
below
$72,000
because
hedge
funds
are
short
on
futures.

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Though
this
has
been
a
known
development
for
a
while,
hedge
funds
have
stacked
their
BTC
shorts
via
the
Chicago
Mercantile
Exchange
(CME)
by
over
$1
billion
in
the
last
week
alone.

Hedge
funds
shorting
BTC
futures
|
Source:
@AxelAdlerJr
via
X


Therefore,
the
analyst
says
two
things
must
happen
to
reverse
this
effect
and
support
prices.
Although
the
BTC
shorting
on
CME
is
not
necessarily
a
bearish
signal,
hedge
funds
are
hedging
by
playing
a
sophisticated
arbitrate
strategy,
and
coin
holders
must
look
at
fundamentals.


Hedge
funds
are
simultaneously
shorting
BTC
futures
on
CME
and
buying
on
the
spot
market.
Therefore,
for
the
coin
to
break
$72,000
and
pierce
$74,000,
the
analyst
said
users
must
buy
at
least
2X
the
amount
of
BTC
futures
shorted
in
the
spot
market.


BTC
Prices
Must
Fall
For
Short
Sellers
To
Exit


If
there
is
no
incentive
to
lift
spot
prices
higher,
then
Bitcoin
prices
must
fall.
Falling
prices
will
encourage
short
sellers,
in
this
case,
the
hedge
funds,
to
exit
their
positions
lest
they
continue
paying
funding
rates.
In
a
bearish
market,
and
when
futures
prices
begin
to
fall,
short
sellers
must
pay
longs
for
the
index
not
to
deviate.

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Whether
there
will
be
a
spike
in
demand
in
the
spot
market
remains
to
be
seen.
However,
what’s
evident
is
that
institutional
interest
in
Bitcoin
is
there,
only
that
hedge
funds,
as
seen
from
their
arbitrage
trade
using

CME,
want
to
profit,
regardless
of
price
movements.


Related
Reading


The
analyst
also


shared


another
chart
to
solidify
the
bullish
outlook.
The
trader
used
the
“Growth
Rate”
metric
to
compare
changes
in
Bitcoin’s
market
and
realized
cap.

Bitcoin
“growth
rate”
metric
down
|
Source:
@AxelAdlerJr
via
X


Currently,
the
metric
is
at
around
0.001,
way
below
0.002,
meaning
the
market
is
highly
likely
overheated.
Bulls
might
be
preparing
to
make
a
comeback.

Feature
image
from
DALLE,
chart
from
TradingView

Go to Source
Author: Dalmas Ngetich


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